Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Piramal Healthcare : Pharma solution business picks up…
Piramal Healthcare’s (PHL) Q3FY11 results are not comparable on both
YoY and QoQ basis as it sold its domestic formulation and diagnostic
businesses. Total income from operations and net profit declined 55.6%
to | 402.69 crore and 55.7% to | 60.3 crore, respectively. On a
comparable basis, total income from operations rose 26% driven by a
41% increase in sales from the CRAMS business (assets in India).
However, at the EBITDA level, PHL continued to post a loss of | 18 crore
compared to a loss of | 9.5 crore in Q3FY10. Net profit stood at | 60.3
crore as against a loss of | 33.6 crore in the corresponding previous
period, which was mainly driven by investment income. We are
assigning a BUY rating to the stock as it is quoting below our calculated
cash per share value of | 470.
Highlights of the quarter
The company earned an interest income of | 132.2 crore derived
from the amount invested, which was received via sale of both the
domestic formulation business and the diagnostic business
After almost seven or eight quarters of slowdown, the pharma
solution business is witnessing some definite recovery. During the
quarter, sales from the pharma solution business increased 24% to |
233.4 crore. Sales generated from assets inside India grew 41% to |
132.6 crore
The OTC and ophthalmology business grew 32% to | 54.7 crore
during the quarter
Management guidance
The company expects to clock a topline of | 530 crore in Q4FY11 while
income from investment would be around | 100 crore. EBITDA margins
are expected to be around 14%.
Valuation
The management has maintained that the real picture of the future
performance will be clear only at the end of the current quarter, as the
company is gaining back the confidence from prospective CRAMS
customers. They are still evaluating various business options for investing
the cash received from Abbott and SRL and this process will take some
more time. We appreciate the time delay as Piramal has a good track
record of successful acquisitions in the past. We have arrived at a value of
cash at | 470 (refer valuation basis table). For the time being, we have
maintained the same as our target price as we have not assigned any
value to the continuing businesses at this juncture. We have assigned a
BUY rating to the stock.
Result Update
Like to like sales up 26%
The results are not comparable both YoY and QoQ as it has sold its
domestic pharma business and diagnostic business to Abbott and SRL,
respectively. The total income from operations declined by 56% to |
402.69 crore. On a like-to-like basis, total income from operations
increased 26% YoY. The OTC and ophthalmology segment registered a
growth of 32% to | 54.7 crore. The pharma solutions (CRAMS business)
increased 24% to | 233.4 crore as assets in India grew by 41% to | 132.6
crore. The critical care business also supported the topline growth, with
an increase of 28% to | 99.4 crore.
Continues to post loss at EBITDA, on a like-to-like basis
EBITDA loss during the quarter was | 32.6 crore as against profit of |
177.4 crore. On a like-to-like basis, the loss at the EBITDA level was higher
at | 18 crore compared to a loss of | 9.5 crore in Q3FY10. Since most of
the expenses were fixed in nature, the management has indicated that the
losses will be wiped out by incremental sales.
Higher investment income boosts profits
Despite a loss at the EBITDA level, it reported net profit of | 60.3 crore
during the quarter. This was on the back of investment income of | 132.2
crore related to cash generated through sale of both businesses. On a
comparable basis, profit for the quarter was | 60.3 crore as against a loss
of | 33.6 crore in the corresponding previous period.
Valuation
The management has maintained that the real picture of future
performance will be clear only at the end of the current quarter as the
company is gaining back the confidence from prospective CRAMS
customers. They are still evaluating various business options for investing
the cash received from Abbott and SRL and this process will take some
more time. We appreciate the time delay as Piramal has a good track
record of successful acquisitions in the past. We have arrived at a value of
cash of | 470 (refer valuation basis table). For the time being, we have
maintained the same as our target price as we have not assigned any
value to the continuing businesses at this juncture. We have assigned a
BUY rating to the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Piramal Healthcare : Pharma solution business picks up…
Piramal Healthcare’s (PHL) Q3FY11 results are not comparable on both
YoY and QoQ basis as it sold its domestic formulation and diagnostic
businesses. Total income from operations and net profit declined 55.6%
to | 402.69 crore and 55.7% to | 60.3 crore, respectively. On a
comparable basis, total income from operations rose 26% driven by a
41% increase in sales from the CRAMS business (assets in India).
However, at the EBITDA level, PHL continued to post a loss of | 18 crore
compared to a loss of | 9.5 crore in Q3FY10. Net profit stood at | 60.3
crore as against a loss of | 33.6 crore in the corresponding previous
period, which was mainly driven by investment income. We are
assigning a BUY rating to the stock as it is quoting below our calculated
cash per share value of | 470.
Highlights of the quarter
The company earned an interest income of | 132.2 crore derived
from the amount invested, which was received via sale of both the
domestic formulation business and the diagnostic business
After almost seven or eight quarters of slowdown, the pharma
solution business is witnessing some definite recovery. During the
quarter, sales from the pharma solution business increased 24% to |
233.4 crore. Sales generated from assets inside India grew 41% to |
132.6 crore
The OTC and ophthalmology business grew 32% to | 54.7 crore
during the quarter
Management guidance
The company expects to clock a topline of | 530 crore in Q4FY11 while
income from investment would be around | 100 crore. EBITDA margins
are expected to be around 14%.
Valuation
The management has maintained that the real picture of the future
performance will be clear only at the end of the current quarter, as the
company is gaining back the confidence from prospective CRAMS
customers. They are still evaluating various business options for investing
the cash received from Abbott and SRL and this process will take some
more time. We appreciate the time delay as Piramal has a good track
record of successful acquisitions in the past. We have arrived at a value of
cash at | 470 (refer valuation basis table). For the time being, we have
maintained the same as our target price as we have not assigned any
value to the continuing businesses at this juncture. We have assigned a
BUY rating to the stock.
Result Update
Like to like sales up 26%
The results are not comparable both YoY and QoQ as it has sold its
domestic pharma business and diagnostic business to Abbott and SRL,
respectively. The total income from operations declined by 56% to |
402.69 crore. On a like-to-like basis, total income from operations
increased 26% YoY. The OTC and ophthalmology segment registered a
growth of 32% to | 54.7 crore. The pharma solutions (CRAMS business)
increased 24% to | 233.4 crore as assets in India grew by 41% to | 132.6
crore. The critical care business also supported the topline growth, with
an increase of 28% to | 99.4 crore.
Continues to post loss at EBITDA, on a like-to-like basis
EBITDA loss during the quarter was | 32.6 crore as against profit of |
177.4 crore. On a like-to-like basis, the loss at the EBITDA level was higher
at | 18 crore compared to a loss of | 9.5 crore in Q3FY10. Since most of
the expenses were fixed in nature, the management has indicated that the
losses will be wiped out by incremental sales.
Higher investment income boosts profits
Despite a loss at the EBITDA level, it reported net profit of | 60.3 crore
during the quarter. This was on the back of investment income of | 132.2
crore related to cash generated through sale of both businesses. On a
comparable basis, profit for the quarter was | 60.3 crore as against a loss
of | 33.6 crore in the corresponding previous period.
Valuation
The management has maintained that the real picture of future
performance will be clear only at the end of the current quarter as the
company is gaining back the confidence from prospective CRAMS
customers. They are still evaluating various business options for investing
the cash received from Abbott and SRL and this process will take some
more time. We appreciate the time delay as Piramal has a good track
record of successful acquisitions in the past. We have arrived at a value of
cash of | 470 (refer valuation basis table). For the time being, we have
maintained the same as our target price as we have not assigned any
value to the continuing businesses at this juncture. We have assigned a
BUY rating to the stock.
No comments:
Post a Comment